See Also:

Investment Accounting Policy

Cash Equivalents and Short-term Investments

Netflix considers investments in instruments purchased with an original maturity of 90 days or less to be cash equivalents. Netflix also classifies amounts in transit from payment processors for customer credit card and debit card transactions as cash equivalents.

In July 2017, Netflix sold all short-term investments. Netflix classified short-term investments, which consisted of marketable securities with original maturities in excess of 90 days as available-for-sale. Short-term investments were reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive loss” within Stockholders’ equity in the Consolidated Balance Sheets. The amortization of premiums and discounts on the investments, realized gains and losses, and declines in value judged to be other-than-temporary on available-for-sale securities are included in “Interest and other income (expense)” in the Consolidated Statements of Operations. Netflix used the specific identification method to determine cost in calculating realized gains and losses upon the sale of short-term investments.

Short-term investments were reviewed periodically to identify possible other-than-temporary impairment. When evaluating the investments, Netflix reviewed factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, Netflix’s intent to sell, or whether it would be more likely than not that Netflix would be required to sell the investments before the recovery of their amortized cost basis.